U.N. oil overseers notified Iraqi crude customers by telex on December 19th not to pay a surcharge into a separate account outside U.N. control as Baghdad had demanded.

The notification came after the U.N. sanctions committee agreed on December 15th to an amended U.S. proposal telling buyers not to pay any oil surcharges to Iraq.

Moscow had blocked previous efforts by the committee to issue a statement, but Iraqi crude customers were informed that the sanctions committee had not approved a surcharge of any kind, that payments for Iraqi oil cannot be made into a non-U.N. account and that buyers should not pay any surcharge to Iraq.

The letter was in response to renewed requests from Baghdad that its customers pay a 40-cent premium into a direct account.

Buyers had earlier refused Iraq’s request, which would have meant a contravention of sanctions against the country, and which prompted Baghdad to halt exports late on November 30th.

Loadings resumed on December 13th at the Gulf port of Mina al-Bakr, with exports currently running at about 1 million b/d. Liftings from Iraq’s other approved export route – the Turkish port of Ceyhan – have not yet been restarted.

Baghdad had proposed on December 15th that prices to Europe for its Kirkuk grade be cut by 80 cents to Dated Brent minus $4.35 a barrel for the latter part of December in an effort to resume exports at the Turkish port of Ceyhan.

Iraq argued that the current mechanism puts Iraqi crude prices at a disadvantage to rival Russian Urals grade and also asked that prices of its Basrah Light crude be discounted to Europe at Dated Brent minus $5.55.

The oil overseers rejected the proposal on December 18th, saying that recent price slides do not merit the cuts. The U.N. sanctions committee has until 2300 GMT on December 19th to object to the Iraqi request